BizClik Media concludes Procurement & Supply Chain LIVE
As more visitors joined Procurement & Supply Chain LIVE for risk and resilience insights, BizClik Media Group had lined up another day of speakers across its two-stage set up along with its digital stages.
Similar to day one, Tobacco Dock provided viewers with a large networking space to converse with procurement and supply chain leaders and businesses from across the globe. The event sponsors were also in attendance at the event, including UST, Interos, SAP, GEP, BCG, and Tealbook.
Breaking down barriers to environmental sustainability
Kickstarting Day 2 on the Main Stage at Procurement & Supply Chain LIVE: the Risk & Resilience Conference, Sheri Hinish, Executive Partner, IBM Sustainable Supply Chain, Finance and Circularity took to the stage to discuss: Breaking down barriers to environmental sustainability.
“Sustainability is not someone else's problem,” begins Hinish. “More than 50% of CEOs believe that business leaders must take responsibility for the business impact on communities in which they operate.”
Despite environmental sustainability being a priority, there is a gap. 86% of CEOs currently have a sustainability strategy, yet only 35% have acted on their strategies.
The most frequently identified challenges faced by CEOs are sustainability and regulatory pressures. This belief has increased by 21% since 2021, with CEOs facing additional top-level pressures to be 5x more transparent.
What does transparency in supply chain look like?
The supply chain is a constantly changing environment, “you can’t just turn on a solution and transform,” says Hinish.
In order to achieve trust and transparency an organisation needs more than due diligence and compliance, an organisation also needs optimisation, transformation, innovation and experience.
Despite the optimism of many, 57% of CEOs are unclear when it comes to the ROI and economic benefits of sustainability.
Breaking down barriers
When it comes to sustainability, there are three criteria’s for orgnaisations to better understand their approach: sustainability commitment; sustainability effectiveness; and sustainability integration.
“Trailblazers and strivers are breaking the barriers,” says Hinish, and with digitalisations organisations can “make sustainability visible, actionable and operational.”
Those that are purpose led in the pursuit of sustainability and recognise the value and impact it has, these trailblazers are outperforming other in the industry. They focus on six core areas:
- Leveraging sustainability as a catalyst for transofrmation
- Tap the potential of emerging technologies and data
- Enbeding sustainability within operations and the wider organsiation
- Broaden C-Level and CEO involvement and responsibility
- Collaborate with ecosystems and supply chains
- Engage with employees and customers
Risk Mitigation in the Supply Chain Panel
Taking to the Main Stage with Scott Birch, Chief Content Officer at BizClik Media Group, for the first panel of Day 2, Richard Jowers, Director at SAP; Tom Woodham, Partner at PwC; and Andrea Ricciarelli, Domain Advisor of Supply Chain Logistics and Sustainability at SAP, discussed risk mitigation in the supply chain.
How can technology help to mitigate risk?
“Technology is not the only answer,” says Woodham. “People, processes and data are also key, but technology can certainly help with the identification of issues before they exist.”
Tech is not a silver bullet, so it’s important to identify the priorities and where it is best integrated.
Modern procurement's role in mitigating risk
“Procurement plays a key role in taking action to support the organisation and mitigate risk,” says Jowers.
With procurement sitting on vast quantities of data that can be analysed and acted upon, the function will be crucial to help suppliers tackle the pressures to meet requirements.
How clear is the picture on problems for the c-suite?
When it comes to understanding risk and challenges at the c-suite level, Woodham explains: “it is better now than three to four years ago. In the last couple of years, most big companies have thought about whether they have the ‘right kind of supply chain’.
“People have realised that it is part of their business and needs to have visibility.”
Despite this clarity among c-suites, Woodham fears that people will start to forget the importance of supply chains as the years of COVID-19 become more distant.
Where is the best place to start with investment?
With the range of risk being so broad in today’s supply chains, Jowers stresses the importance of starting with data.
“But you need to ensure that it is clean data in order to analyse, prioritise, make decisions, communicate with others and act upon. So lead with data first of all!
Agreeing with Jowers, Woodham says: “data is definitely the place to start. Too often people start with the last risk they experienced rather than plan for the next one.
“Instead, organisations should look at what key capabilities they required that they didn’t have, rather than fixing a single past problem. We need to think broader when we approach risk.”
Are markets changing, is more value being placed on resilience?
“Companies have always invested in resilience,” says Woodham. “But in the last few years, the significance of it has been highlighted, resilience has raised in profile.”
“Organisations are looking to and learning from the past,” says Jowers. “There is a war on talent right now to help address these challenges.”
What will be the next challenges in five years time?
“The next five years are uncertain,” says Ricciarelli. “Everything that has happened in the last three years was unexpected, emphasis will be placed on whether an organisation has enough speed and agility to react to the future challenges.”
Expanding on Ricciarelli’s comments, Jowers expects to see organisations increase their focus on understanding risks relating to ESG.
He says: “Many countries are already implementing legislation such as Germany and the US. There will be an increased focus on human rights, as well as understanding Scope 3 emissions and the actions that will need to be taken.”
Woodham adds: “with technology it will be easier to get data to gain visibility. This will be crucial to get right in the next five years.
“However, with connectivity and AI comes a new kind of risk, we will also see an increase in cybersecurity in the next five years.”
The future of the Government Commercial Function
During his keynote speech, Gareth Rhys Williams, Government Chief Commercial Officer, Cabinet Office discussed: the future of the government commercial function.
Describing the function as a network, Williams walked the audience though the government’s move from focusing on best commercial contracts and best vendor management to best contract management.
“We have put together a variety of implementations to incorporate the right people and the right structure to drive this success,” says Williams.
He adds: “Its in no-ones interest to see vendors going to the wall because their methods no longer work, we need to start having grown up conversations about these topics.”
By 2025, the government commercial function has ambitions to be the best commercial function in the UK. Which they aim to achieve with the use of technology, strengthening and building partnerships, and developing supply chains.
Currently, the government commercial function has removed £3.7bn in waste spend with this approach. With ambitions to continue to reduce waste each year by the same percentage.
The supply chain journey in Maersk Drilling
“Oil and Gas is a relatively slow moving industry,” begins Rup Banerjee, Director and Head of Global Inventory Management at Maersk Drilling. “However, 2019 saw the acceleration of everything.”
In his three years at the organisations Maersk has become a standalone company, battled COVID-19, and re-merged with a new company called Noble.
“It is like someone has picked up the company shook it around and put it back down,” says Banerjee.
Walking through the company’s transformation, Banerjee starts with Maersk Drilling’s de-merger from the Maersk brand. “This kickstarted a major supply chain transformation,” says Banerjee. “The listing as a separate company called for ‘upgades’ in key areas.”
Banerjee adds: “We had to create a standalone and capable supply chain. We changed our global footprint, reviewed contracts, built a new approach to inventory management, increased spend coverage, adjusted P2P, developed sustainability roadmap, and enabled standalone support systems.”
In 2020 and 2021, the global market conditions changed during the company’s execution of its transformation. Maersk Drilling merged with Noble with a focus on maintaining business continuity while preparing integration.
Key priorities include:
Banerjee concluded by highlighting some of Maersk Drilling’s key learnings:
- Fundamentals never go out of fashion
- Use technology and data to support the organisation
- Commit to and communicate targets
- It takes time to build the right team
- Collaboration is essential
- Be prepared for change in three year cycles
Leveraging the power of supplier collaboration and innovation to drive sustainable business growth
“There is no greater crisis than climate,” says Mark Perera, CEO of Vizibl. “There is uncertainty on a global scale. We are in very disruptive times, sustainability is affecting organisations not only in how they run today but in the future too.”
However, Perera is concerned. “We’re not far enough along the journey to achieve 2030 goals. We need to make a more of a collective effort to increase the pace of change.”
He adds: “Pressures are rising to address value chain impact, you are not an island, your organisation is part of the value chain. COP26 was a wake-up call. It raised awareness that individuals have to make a difference.”
Reducing Scope 3 emissions
Deep diving into the scale and complexity of Scope 3 emissions. Perera stresses that the time is now, “We have to start. Organisations are focused on getting the ‘right data’ but we have to start the movement, we can’t wait for the ‘perfect data’.”
- We are facing the biggest threat to businesses, people and planet
- To truly rackle climate change, organistions must reduce Scope 3 emissions
- We don’t have time to wait for the perfect data or to construct a perfect baseline
- Control the controllable, and prioritise around what you do know
- Use leading indicators as a reliable predictor of lag metric performance, and prioritise building active, collaborative relationships with strategic supplier stakeholders
Taking to the Main Stage, Martin Rand, CEO, Pactum and Lucus Rulff, Head of Digital Procurement Excellence, Maersk gave the audience a demonstration of the implementation of AI bots in negotiations. The two organisations began working together two years ago.
“Our mission is to tell the world that negotiations can bring more value, and that value can come from technology,” says Rand.
Digital and the Future of Procurement
“The last two years have shown that it has been business as un-usual,” opens Nicholas Wright, Digital and Innovation Sourcing Director at BP.
Discussing the future of procurement, the use cases for digital and the best practices for implementation Wright emphasises digitalisation role in helping organisations to navigate the complexities and challenges of modern supply chains.
“It can drive a more predictive function, it can drive the elimination of low value tasks, and drive intuitive monitoring, obligations management and payment invoices.”
Building a sustainability strategy in a new reality
When it comes to sustainability “there are a lot of decisions to make,” says Jan Francis, Director and Head of Procurement Operations and Supplier Management, Europe Sourcing Visa.
Echoing Perera’s earlier discussion, Francis stresses that “the time has been ‘now’ for 50 years!”
Quoting Larry Fink’s 2022 letter to CEOs, Francis adds: “Every company and every industry will be transformed by the transition to a net zero world. The questions is, will you lead, or will you be lead?”
Visa’s sustainability strategy
Francis walked the audience through Visa’s top-level, multi-year goals for sustainability which include:
- Carbon neutral operations now
- Net zero by 2040
- Climate positive on-going
Visa aspires “to be the engine of sustainable commerce and the transition to a low-carbon economy.”
Specifically for Europe Sourcing Visa, Francis outlines the company’s key focuses areas when it comes to sustainability:
- Gain greater visibility of our supply chain sustainability
- Strengthening sustainability stance in supplier facing documents
- Increasing the number of diverse suppliers
- Increase the diversity of supplier teams
- Collaborating with suppliers to reduce the environmental impact of the supply chain
Francis concludes his keynote by outlining the top challenge he has experienced when creating a sustainability strategy, and his top tips:
- Stakeholder education
- High expectations
- Strategic alignment
- Regulation and legislation
- Identify your sponsors
- Communicate and educate
- Set your strategy and mutli-year plan
- Leverage external resources - but be specific
- Actively engage your suppliers - collaborate
Disaster planning and ‘Supply Chain Agility’
Many organisations are yet to navigate through the digital transformation pathway. Ashley Naughton, Director of Supply Chain Transformation at Capgemini, and Shaun Plunkett, Vice President of Global Physical Supply Chain at Macmillan Education, discussed the ways in which businesses can leverage partnerships to succeed in their digital transformations.
During the ‘Supply Chain Agility’ panel, the pair highlighted some of the key aspects of a good partnership and the opportunities they can bring in times of natural disaster and unprecedented events. However, Blaise Hope, Editor-in-Chief of Sustainability Magazine and presenter on the stage provokes the thought that data on such events has been accessible and the mindset must change to accept that events will take place—as opposed to speculating.
Naughton also points out that businesses, particularly those with limited investment capabilities, should look at the important aspects of their supply chains. “It’s a tricky one for a lot of organisations to see past their immediate first tier,” says Naughton.
“Different sectors have slightly different challenges, but that insight is quite limited right now and I think there is an investment from both the financial perspective and a resource perspective that will be needed to decide what you actually want to focus on within your supply chain.”
When asked how organisations can build new working relationships with suppliers, Plunkett outlined the importance of face-to-face communications and gave a great example of how initial interaction led to receiving 50% of a supplier’s capacity. He also explains the position of empathy in this and says that firms should incentivise their critical suppliers to encourage loyalty.
Procurement for the Commonwealth Games
Procurement & Supply Chain LIVE also welcomed Alexia Binns, Head of Legal Procurement at Birmingham 2022 Commonwealth Games, to talk about how the organisation carries out its procurement function. With around 60+ procurement contracts at more than £217,477, the group is subject to legislation governing public procurement and Binns talks the viewers through some of the key criteria, which include having a legal personality, meeting set financial obligations, and meeting the needs of general interest with no industrial character.
The team is committed to sustainability, social value, and health and wellness, achieving this across its operations as its takes care of solutions before and after the event, leveraging electronic procurement systems—which are mandatory in the UK for these events—and managing suppliers both large and small.
“We look at the quality and price split. It would never be the price only and social value would come in at 10 to 20% and different [there are] different things within the quality that we would be looking at. Health and safety is another aspect we would look at as well,” says Binns.
“There is really a lot of flexibility within each procurement to tailor it as long as we’ve got our part price, part quality, and our social value, sometimes when you take out the social value you’re at around 50% quality.”
Negotiation is a complex procurement skill
After the first networking break, Deepti Malhotra, Director of Procurement and Vendor Management at Symcor, spoke to the hybrid audience about negotiations and how to improve tactics as part of the procurement process.
Malhotra provided some great insights and tactics from her career that have led her to achieve the right outcomes in negotiations with global corporations. One of the points she highlighted was that negotiators are not necessarily looking to make a profit and the secret to great communication within this stage is to know the goals and objectives of the organisation—and why the supplier is so critical to achieving them—and tailor negotiations to meet the company’s targets.
She also believes that great negotiation skills result from practice and should not be affiliated to a particular group, such as gender.
“As per studies, women negotiators are much more successful than the other, and that brings another type of discussion altogether. But, if you do the right level of practice in advance and you know who you’re dealing with, you can actually come over that,” says Malhotra.
“If you’re clear about your goals, you understand where you’re heading, and have the right level of trust from your stakeholders, it’s helpful. Because, when you’re at the negotiating table, it doesn’t matter who you’re negotiating with—man or woman—if you know your goal and you know the individual’s past reactions and behaviours, you can be flexible in your approach.”
The difficulties of digital adoption
Andy Chivers, Head of Procurement at Wallgreens Boots Alliance, Martin McKie, Principal Advisor, Supply Chain at AWS, and Soroosh Saghiri, Program Director at Cranfield School of Management, joined the stage for the final stage two session of the day — ’Digital Ecosystems’
In particular, the trio discussed some of the important factors of adopting digital technologies and how these are critical for corporations to succeed, and gave examples of scenarios from all organisations where digital ecosystems have been critical.
The panel also discussed the query or ‘buy or build?’ and talks about the benefits and drawbacks of both applications to provide insight into in-house digital ecosystem development and what this may look like when outsourced.
The main takeaway from the talk is that digital ecosystems—and technology across all applications—supports an agile approach to planning and helps business manage risk and become resilient.
Transforming procurement with dynamic supplier data
End Day 2 of Procurement & Supply Chain LIVE: The Risk & Resilience Conference, Stephany Lapierre, CEO and Founder, Tealbook took to the stage to discuss: Transforming procurement with dynamic supplier data.
“We all have a big data problem,” she begins. “It’s a complex challenge that is hard to manage and maintain.”
In the last few years, organisations have moved to the cloud with the promise of digital transformation. “But software doesn’t fix data,” says Lapierre. “Just because you have implemented a technology doesn’t mean you will have clean data. You are still dependent on humans maintaining information.”
No matter how much AI and ML you throw at data if it's incomplete or unclean you won’t be able to gain high-quality insights, which leads to narrow visibility.
It is this poor data quality that leads to failed digital transformation.
“The supplier base is the biggest untapped asset, if optimised properly, it can deliver hundreds of millions of dollars in value, provided that supplier data is dynamic and available across systems and people.”
Concluding the ‘Risk & Resilience’ conference
The two-day event was the first Procurement and Supply Chain of BizClik Media Group’s agenda for 2022. Both the in-person and virtual attendees witness a whole host of different insights from business supply chain and procurement leaders from across the globe, which they will have access to on-demand. Both the networking and lunch arrangements and co-working spaces, provided in-person visitors with a comprehensive experience and contact with new connections from multiple industries.
Visit the BizClik Media Group website and socials to see the full lineup of events for 2022 and catch up on the latest sessions at Supply Chain Digital Magazine and Procurement Magazine.